On a Skype video conference this morning, I noticed the software did something very interesting. Instead of pixelating video when my crappy broadband internet connection slowed down briefly, it
zoomed.
It was accomplished so smoothly I wouldn't even have noticed except that I was talking with a room full of people on the other end and suddenly I couldn't see the people on the sides any more.
Instead of reducing the full-frame video resolution when bandwidth grew scarce, as it usually does, instead this time Skype selected the middle portion of the frame and showed it clearly. It was very subtle. It was done completely smoothly. The effect was aesthetically pleasing, not disruptive at all, and an elegant solution.
Well done, Skype.
I believe that the LifeCam looks for movement in the peripheral area. If there is no movement there, the LifeCam will truncate the sides of the image. I have sometimes been able to force the sides to appear by waving my arms off to the side.
When I first noticed this happening, I was surprised that many "people on the side" don't move or talk at all, thus triggering a truncation. But I started looking for this, and most "people on the side" barely move at all.
In my experience, Skype video quality tends to degrade by simply freezing the screen. I have also noticed this behavior when Skype was off entirely, when recording a video of myself. So I'm pretty sure it's the webcam itself auto-controlling the width, and not Skype.